For further information please contact CIO's asset class specialists Dominic Schnider, dominic.schnider@ubs.com or Giovanni Staunovo, giovanni.staunovo@ubs.com
Please see important disclaimer and disclosures at the end of the document.
Base metals
Preference: neutral
Current (last month): copper USD 7,317/mt(7792); nickel USD 16,528/mt(16833); aluminum USD 1,825/mt(1989)
UBS View 6-month target: copper: UDS 7,400/mt nickel: USD 18,000/mt; aluminum: USD 2,200/mt
• With the exception of aluminum, base metal prices stabilized broadly in June. But we see room for
somewhat lower prices in the short run (4-6 weeks). Deteriorating industrial activity in Asian countries,
weak US data and the Euro-zone crisis remain a price burden for the sector in the early part of 3Q12.
• To weigh on scrap supply and compensated for lower Chinese copper imports, copper prices are likely to
decline towards USD 6600/mt, in our view. For the rest of the base metals, prices could move deeper into
the cost curve of production. When it comes to aluminum and nickel, however, prices have already
declined deeply into the production cost curve. In both cases supply cuts could come quicker and limit the
price downside from current levels.
• In addition, supply uncertainty related to aluminum and nickel needs to be considered as well.
Indonesia's new regulations on ore exports could jack up Chinese import costs by around 20% in the
coming quarters. We think such an increase would be meaningfully, as 60% of China's nickel pig iron (NPI)
production and 80% of China's bauxite imports depend on Indonesia.
• The reason why base metals overall should trade at current levels or higher in six months from now,
relates to China. We think the People's Bank of China has made the right monetary policy steps to achieve
stronger credit activity and higher sequential GDP growth in 2H 2012. With this fairly balanced risk reward
on a six-month horizon, we maintain our neutral position.
� Positive scenario
• China eases monetary policy aggressively, by pushing credit growth beyond 20% y/y. Additional QE in
the US paired with stable European and Japanese demand would allow the sector to rally by around 25%.
� Negative scenario
• Chinese monetary conditions remain behind the curve, resulting in an economic hard landing. A severe
escalation of the Eurozone crisis (deep recession/global impact) could also bring prices close to 2009 levels.
What we're watching Why it matters
Demand The latest uptick in Chinese imports, driven by technical factors, do not
reflect stronger end demand. The June figures (on 10 July) should give some
clarity. That said, the attractiveness to import from an arbitrage perspective
SHFE to LME has improved. Interest for physically backed copper ETFs needs to
be tracked as exchange inventories are structurally low.
Supply
Copper supply has room to improve in 2H 2012 from poor mine output in 1H
2012. Fading supply disruptions and capacity additions put copper at risk.
Indonesia's new export rules could have a positive one-off impact on aluminum
and nickel.
Economic data/forward
curve
People's Bank of China meeting, Chinese economic data (especially IP and loan
growth by financial institutions) Key dates: 11–15 July
Recommendations
Tactical (3-6 months)
• From a timing perspective, building up
exposure to base metals is not yet
advised. While we still expect higher
prices over the next 6–12 months, the
short-term downside risks should offer
investors better entry points, particularly
for copper. That said, existing aluminum
and nickel positions should be kept.
Strategic (>1 year )
• Rising energy and labor costs provide the
backdrop for base metal prices to trend
higher. The strongest performance is
likely to come from zinc and lead, where
existing mine capacity is expected to peak
in 2014. Environmentally challenged base
metals, like tin, should be in line with the
sector average. For nickel and aluminum,
ample production capacity should lead to
an underperformance in the long run.
Due to its high current price versus
production costs, copper should lag too.
Heavy industrial activity in China, with
high commodity use, slumped
Source: Bloomberg, UBS CIO, as of 18 June 2012
Note: Past performance is not an indication of future returns.
37
For further information please contact CIO's asset class specialists Dominic Schnider, dominic.schnider@ubs.com or Giovanni Staunovo, giovanni.staunovo@ubs.com
Please see important disclaimer and disclosures at the end of the document.
25
20
15
10
5
0
Cumulative year-on-year values, in %
Feb-99 Feb-02 Feb-05 Feb-08 Feb-11
Light industry value added
Heavy industry value added
Agriculture
Preference: underweight
Current (25 June) (last month): Soybeans, USD 14.79/bu (USD13.82/bu); Corn, USD 6.09/bu(USD 5.79/bu);
Wheat, USD 6.91/bu (USD 6.80/bu)
UBS View 6-month target: Soybeans, USD 13.5/bu; Corn, USD 5.10/bu; Wheat, USD 6.00/bu
• Besides the overall commodity price backdrop, prevailing dry weather conditions in the US have been
price supportive for the grains and added to firmer prices.
• While weather-related news flows might support grain prices in the short run (downward revisions in
grain yield estimates, especially corn), the 6–12 month price outlook remains negative. Global corn
inventories should grow beyond 10% in 2012/13. We think this will more than compensate for firmer
wheat fundaments (lower inventory estimates) in the coming months. For soybeans, current price levels
sufficiently factor in the poor supply figures seen in recent months. This would be especially true, if South
American planting gets a boost due to soybeans' relative price improvement.
• A strong supply backdrop for Brazilian coffee along with a weaker BRL has kept coffee prices under
pressure. For 2012/13, Brazilian coffee and sugar exports are likely to increase by 12% and 2% y/y
respectively, and keep the global market well supplied in 2012. Cotton prices saw some bouts of strength,
but demand has yet to work off high inventory levels at 74–75mn bales. With ample inventories and
economic conditions at risk, renewed price weakness is likely.
� Positive scenario
Soybeans 6-month USD 16/bu
• Lower acreage and yield figures for the US can tighten the supply backdrop until 1Q 2013 (until the new
South American crop comes). On the demand side, higher soybean use for bio diesel in Argentina and
strong Chinese imports (improvements in crush margins) are catalysts for prices to rally.
� Negative scenario
Soybeans 6-month USD 12/bu
• Unexpected Chinese government stock sale of soybeans and deteriorating crushing margins for soybean
oil/meal production, would leave soybean prices vulnerable to a price correction.
What we're watching
USDA WASDE report
(monthly)
Grains stock report
(quarterly)
USDA crop progress
(weekly, Monday)
COT (weekly, Friday)
Why it matters
US corn yields could be at risk in the upcoming WASDE release. Key date : 11
July 2012
Corn and soybean inventories could be lowered vs. current estimates, reflecting
the strong export activity in corn during March–May and higher soybean crushing
during the same period. Key date: 28 September 2012
Dry weather conditions in the US has impacted the crop conditions (rating),
which deteriorated in recent weeks.
Investors have scaled back their long exposure in corn. At the present speed, net
positions would close in on zero over the next two months.
Recommendations
Tactical
• The forward curve in corn already factors
in a steep decline by the end of the year,
thereby mitigating the expected negative
return. With lower corn prices, wheat
should come under pressure as well. Most
agricultural commodities are generally
well supplied, so unless the weather
surprises on the downside, we expect
further weakness.
Strategic
• Strategic agricultural positions are not
recommended at present. Our return
outlook for the grains stands at –7.5% to
– 5% over the next 12 months. Although
the softs have a positive return outlook
over the same period, investors should
bide their time. Short-term price setbacks
of 10% or more are still likely over the
next two to three months.
Global corn surplus as % of demand to
advance towards 5-year high
12%
8%
4%
0%
-4%
-8%
2009/10 2010/11 2011/12 2012/13E
Corn Soybeans Wheat
Source: USDA, UBS CIO, as of 18 June 2012
Note: Past performance is not an indication of future returns.
38
For further information please contact CIO's asset class specialists Dominic Schnider, dominic.schnider@ubs.com or Giovanni Staunovo, giovanni.staunovo@ubs.com
Please see important disclaimer and disclosures at the end of the document.
Listed real estate Preference: neutral
UBS Global Index DTR (28 June): 1,375 (last month: 1,320)
UBS View UBS Global Index DTR (6-month target): 1,400
• A slight positive monthly performance has been driven by rebounds in the higher beta markets,
respectively Hong Kong, Japan and Singapore.
• Listed real estate is still attractively valued on different earnings ratios and trade on a slight discount to
NAV. Earnings yields over 5 year swap rate are attractive currently attractive, yet the flattening of interest
curves has come to a halt and we see less support from it in the future.
• Little supply of commercial space across the globe leads vacancy rates to gradually decline and low
capitalization rates in core markets support capital values. Also rental yields remain attractive compared to
high grade bond yields. However, further significant capital appreciation is unlikely. This is especially due a
slow down in rental income as economic growth is subdued. Hence, future performance is limited.
• Although slightly reduced, we maintain our preference for US REITs due to stable fundamentals and like
Australia as a conservative play. We slightly overweight Hong Kong, stay neutral towards Singapore, but
maintain a slight underweight in Japan as fundamentals remain unconvincing.
� Positive scenario UBS Global Index DTR (6-month target): 1,500
• Improving macroeconomic data in the US, positive economic surprises in Europe followed by monetary
easing in China help to increase growth prospects that support rental income growth, while refinancing
costs remain low in a low inflation environment. Real estate offers a comparatively attractive yield.
� Negative scenario UBS Global Index DTR (6-month target): 1,300
• The US growth path disappoints investor expectations and causes the comparatively high valuation levels
there to correct, significantly affecting global real estate. Furthermore, a more severe recession in Europe
triggers a tightening of credit standards, making listed real estate more dependent than ever on bank
financing at a time when credit markets are already fragile. Real estate underperforms global equities
because the correlation between the availability of credit and short-term performance is high.
Note: Scenarios refer to global economic scenarios (see slide 7)
What we're watching
Capitalization rates and
rental yields
Transaction volumes and
future rental growth in
direct markets
Credit markets and
financing costs
Why it matters
We do not expect capitalization rates to decrease much from now. Rental yields
have already been pushed down by decreasing bond yields; we see a diminishing
support from the interest curve, which has significantly flattened in the past.
Global commercial real estate transaction volumes are down year-on-year due to
a lack of product in core markets and constraints on debt financing. Global rental
growth has softened and very modest growth will feature major markets overall.
Lending conditions have been a little tightened. However, well financed listed
companies have still good access to credit, while others are more restricted.
Recommendations
Tactical (6 months)
• We maintain our neutral stance towards
listed real estate after a good performance
year-to-date and due to a relative less
attractive valuation compared to global
equities. Going forward returns are limited
by subdued revenue growth. However, we
still expect listed real estate to stay
comparatively attractive in a low growth,
low rates environment.
Strategic (1 to 2 years)
• A cyclical slowdown in rents limits growth,
but attractive refinancing conditions are
supportive. We see potential for higher
payout ratios in the US and Asia, while
Europe has to consolidate balance sheets.
Preference (6 months)
Our market preferences for listed real estate*
North America
Continental Europe
UK
Japan
Hong Kong
Singapore
Australia
-- - neutral + ++
Old
New
* This is our relative preference within the global real estate
sector based on UBS Global Real Estate Index domestic total
return, which is not the overall sector view
Source: UBS CIO, as of 26 June 2012
Note: Past performance is not an indication of future returns.
39
For further information please contact CIO's asset class specialist Thomas Veraguth, thomas.veraguth@ubs.com
Please see important disclaimer and disclosures at the end of the document.
Hedge funds
UBS View
Prefer Relative value and Event-driven
• We expect hedge funds (HF) to offer positive asymmetric returns characteristics vs. the S&P 500 due to
active management and stop-loss strategies. (HF were down 1.9% in May 2012 vs MSCI world at –8.5%)
• Decelerating global growth prospects, the next leg in the ongoing Eurozone crisis, is challenging mostly
equity long-short managers, who are net-long the market. While event-driven managers share some of
the performance drivers, idiosyncratic bets (event) reduce the exposure to markets. The real reason to own
this strategy, however, is the potential for out-sized return in distressed, high yield and other credit
investments as the Eurozone crisis plays out. The inherent hedging in relative-value should remain
appealing. Credit relative-value managers should perform well in this environment of higher fixed income
volatility and increasing pricing anomalies created by central bank interventions (OT2) and limited
competition.
� Positive scenario
Prefer Equity long-short
• A reduction of uncertainty (e.g. resolution in Europe) lowers equities' correlation and volatility. This
helps bottom-up fundamental analysis and equity long/short managers the most. Also, CEOs will likely
make more corporate transactions that can be monetized by event-driven managers, and a clearer
macroeconomic environment with more persistent trends would be supportive for macro managers
� Negative scenario Prefer Trading (Global Macro + CTA)
• A 2011-type scenario in which hedge fund managers get whipsawed through the year with risk-on and
risk-off circumstances, driven by a multitude of political interventions, is difficult to anticipate. That would
impact long-short managers, event-driven, and to a lesser extent global macro managers.
Note: Scenarios refer to global economic scenarios (see slide 7)
What we're watching Why it matters
Global equity direction
/ economic cycle
The outlook for global equities becomes an important HF performance driver.
The economic cycle impacts the strategies differently.
Correlation
Correlation among pair-stocks; an important performance/alpha driver for
equity long/short, the largest HF strategy by assets under management.
Leverage
Gross and net leverage are key to monitoring risk.
Volatility The direction influences certain HF strategies (e.g. convertible arbitrage).
Liquidity Particularly for large HF that are less nimble to enter and exit their strategies
Regulation
Volcker's rule, USCITS III/IV
Recommendations
Strategic (1 to 2 years)
• Active risk management is instrumental for
capital preservation during adverse market
conditions. At the moment, we therefore
favor relative value and event-driven
strategies, since they are less hinged to
equity markets and other risky assets than
trading is.
• Value proposition: Hedge funds should
achieve robust performance over an
extended horizon, while displaying limited
volatility vis-à-vis equities and other risky
assets, in general. Hedge funds minimize
downside losses in adverse market
conditions (e.g. active risk management)
and play a crucial role in wealth
appreciation, since there is less ground to
regain in the recovery phase and
ultimately greater chances for superior
long-term returns.
Performance (year-to-date)
Relative value
Event driven
Trading
Equity hedge
Hedge Funds
-1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0%
Source: HFRI, UBS CIO, as of 18 June 2012
Note: Past performance is not an indication of future returns.
40
For further information please contact CIO's asset class specialist Cesare Valeggia, cesare.valeggia@ubs.com
Please see important disclaimer and disclosures at the end of the document.
Private Equity
Prefer small/mid-cap buyout in US / emerging markets;
UBS View distressed debt in Europe
• Private equity deals in today's volatile and uncertain markets are conservatively financed, with an average
equity cushion of 40%. We like mid-market buyout strategies, which offer long-term exposure to attractive
corporate assets and which rely less on large bank debt syndications.
• Our house view sees large parts of Europe in a stagnation, and business owners are reluctant to sell their
companies, reducing PE deal flow in the region significantly. We therefore prefer North America, which
will see continuous (albeit suboptimal) growth, and emerging markets, which show positive fundamentals.
• Prices for PE transactions have corrected by around 10% this year, although they are still 20% above the
attractive levels seen during the successful years between 2000 and 2004. However, significant dry powder
and high cash positions at corporations keep competition high and hinder prices from falling much further.
� Positive scenario
Prefer small-/mid-cap buyout and secondaries
• An abating Eurozone debt crisis and improved business confidence would increase deal flow and exit
opportunities for private equity managers, but would also increase entry prices. In such a positive scenario,
we would perceive commitment strategies to secondary funds as attractive for building exposure to an
invested private equity portfolio.
� Negative scenario Prefer distressed debt
• A renewed escalation of the debt crisis would significantly impact deal activity, the availability of debt
and company owners' willingness to sell. At the same time, it would offer attractive opportunities within
distressed strategies and lower entry prices for long-term private equity investors.
Note: Scenarios refer to global economic scenarios (see slide 7)
What we're watching
Credit markets
Capital overhang
Purchasing prices (Enterprise
value / EDITDA)
Why it matters
Availability of leverage and credit spreads are important signs of the health of
buyout markets. Small/mid caps are currently financed at 4.3x EBITDA (vs 4.6x
for large-caps) and are more attractive given their lower reliance on bank
financing in a period of ongoing bank deleveraging.
We track deal/exit activity to understand the pressure to invest, future price
dynamics and draw-down profiles for investors. More than USD 930bn of uninvested
capital and expiring investment periods will keep prices elevated.
Price multiples offer valuable insight into private company valuations. YTD
May 2012, buyouts occurred at 8.1x, down from 8.8x seen in 2011. Large-cap
buyouts have come down 10% from the peak last year to 8.6x.
USD bn
Recommendations
Strategic (1 to 2 years)
• We prefer small-/mid-cap buyouts in North
America given the better economic
outlook vs Europe, higher transaction
certainty and more attractive entry prices.
• Investors looking for downside protection
and stability during economic
uncertainties can consider large-cap
buyouts in the US, which offer exposure
to large, diversified companies at more
attractive prices.
• In Europe, the crisis and ongoing
deleveraging have led to attractive
opportunities for special situations. We
thus recommend investing in distressed
debt to benefit from the macroeconomic
adjustment process and selling pressure
for many European banks.
• We advise investors make an ongoing
allocation to private equity in emerging
markets, which offer an attractive way to
capture superior long-term growth and
provide access to small/mid-cap companies
not available through the stock market.
Private equity deals continue to be defensively
financed amidst economic uncertainty
100
90
80
70
60
50
40
30
20
10
0
5.2
33%
30% 31%
31.8
54.2
31%
64.7
40.7
39%
46% 41%
2004 2005 2006 2007 2008 2009 2010 2011 YTD May 12
PE backed high yield issuances (lhs)
28.3
90.6
38%
72.2
Equity cushion in LBOs (rhs)
Source: S&P, UBS CIO, as of May 2012
Note: Past performance is not an indication of future returns.
40%
38.7
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Equity cushion (% of transaction
value)
For further information please contact CIO's asset class specialist Stefan Brägger, stefan.braegger@ubs.com
41
Please see important disclaimer and disclosures at the end of the document.
Note: We emphasize the equal importance of fund manager selection and the commitment strategy. Please note that private equity is an illiquid asset class and must be held at least until the end of the fund (10+ years).
Please note that UBS might not have a product available which reflects our UBS CIO private equity recommendations. Private equity is only suitable for qualified investors (> USD 5m investable assets).
Contact list
UBS WM Global Chief Investment Officer
Alexander Friedman
alexander.friedman@ubs.com
Global Head of Investment
Mark Haefele
mark.haefele@ubs.com
Global Investment Office
Themes / UHNW
Simon Smiles
simon.smiles@ubs.com
Asset Allocation Advisory
Mark Andersen
mark.andersen@ubs.com
Asset Allocation Discretionary
Mads Pedersen
mads.pedersen@ubs.com
Kiran Ganesh
kiran.ganesh@ubs.com
Karsten Bagger
karsten.bagger@ubs.com
Walter Edelmann
walter.edelmann@ubs.com
James Purcell
james.purcell@ubs.com
Achim Peijan
achim.peijan@ubs.com
Markus Irngartinger, CFA
markus.irngartinger@ubs.com
Christopher Wright
christopher-zb.wright@ubs.com
Philipp Schöttler
philipp.schoettler@ubs.com
Oliver Malitius
oliver.malitius@ubs.com
Matthias Uhl
matthias-w.uhl@ubs.com
Regional Chief Investment Officers
Regional CIO Europe
Andreas Höfert
andreas.hoefert@ubs.com
Regional CIO Asia-Pacific
Yonghao Pu
yonghao.pu@ubs.com
Regional CIO Emerging Markets
Jorge Mariscal
jorge.mariscal@ubs.com
Regional CIO Switzerland
Daniel Kalt
daniel.kalt@ubs.com
42
Disclaimer
This document has been prepared by UBS AG, its subsidiary or affiliate ("UBS"). The information is intended as a general market commentary and provided solely for marketing and information
purposes. Opinions expressed herein are those of UBS Wealth Management & Swiss Bank's Chief Investment Office. The information does not constitute UBS financial research. The statutory regulations regarding
independence of financial research are not applicable to this publication. The document is not to be regarded as a sales prospectus, an offer or a solicitation of an offer to enter in any investment activity or investment
advice.
Specific investment objectives, financial situation or particular needs of a recipient are not considered in this document. Tax treatment depends on the individual recipient's circumstances and may be subject
to change in the future. UBS does not provide legal or tax advice. Recipients should therefore obtain independent legal and tax advice in the respective jurisdiction. At any time, UBS, its directors, officers and employees'
or clients may adopt long or short positions or deal as principal or agent in relevant securities or may have a relationship with and provide financial services to issuers of relevant securities that are linked to the subject
matters discussed in this publication. Please note that all investments carry a certain degree of risk. The market in certain securities may be illiquid. Investments may be subject to sudden and large falls in value and on
disposition may pay back less than invested. Changes in foreign exchange rates may have an adverse effect on the price, value or income of an investment. If for a financial instrument a prospectus has been published,
this prospectus is available free of charge via UBS. Information contained herein may refer to past performances or are simulated past performances. Forecasts may be based on prognoses. All of these are not reliable
indicators of future results.
Information contained herein is current as of the date of publication and are subject to change without prior notice. The information has been obtained from sources deemed to be reliable. No representation
or warranty, express or implied, is provided in relation to the accuracy, completeness or reliability of such information except with respect to information concerning UBS. UBS is not liable for any loss or damage arising
out of the use of all or any part of this document.
This document is intended solely for the information of the person to whom it has been delivered and may not be distributed in any jurisdiction where such distribution is restricted or would constitute a
violation of applicable law or regulations. This document is, in particular, not intended for distribution into the US and/or to US persons. UBS specifically prohibits the amendment or the redistribution of this document in
whole or in part without the written permission of UBS and UBS accepts no liability whatsoever for any actions in this respect.
Australia: 1) Clients of UBS Wealth Management Australia Ltd: This notice is distributed to clients of UBS Wealth Management Australia Ltd ABN 50 005 311 937 (Holder of Australian Financial Services Licence No.
231127), Chifley Tower, 2 Chifley Square, Sydney, New South Wales, NSW 2000, by UBS Wealth Management Australia Ltd. This document contains general information and/or general advice only and does not constitute
personal financial product advice. Prior to making any investment decision, a recipient should obtain personal financial product advice from an independent adviser and consider any relevant offer documents (including
any product disclosure statement) where the acquisition of financial products is being considered. UBS AG is authorised to provide financial product advice in relation to foreign exchange contracts in Australia, and as
such UBS AG is responsible for all general advice on foreign exchange and currencies contained herein. 2) Clients of UBS AG: This notice is issued by UBS AG ABN 47 088 129 613 (Holder of Australian Financial Services
Licence No 231087): This document is issued and distributed by UBS AG. This is the case despite anything to the contrary in the document. The document is intended for use only by “Wholesale Clients” as defined in
section 761G (“Wholesale Clients”) of the Corporations Act 2001 (Cth) (“Corporations Act”). In no circumstances may the document be made available by UBS AG to a “Retail Client” as defined in section 761G of the
Corporations Act. The document is general information only and does not take into account any person’s investment objectives, financial and taxation situation or particular needs. Belgium: This publication is not
intended to constitute a public offering or a comparable solicitation under Belgian law, but might be made available for information purposes to clients of UBS Belgium NV/SA, a regulated credit institution under the
"Financial Services and Markets Authority" and the "National Bank of Belgium", to which this publication has not been submitted for approval. This publication is not intended to constitute a public offering or a
comparable solicitation under Belgian law, but might be made available for information purposes to clients of UBS Belgium NV/SA, a regulated bank under the “Commission Bancaire, Financière et des Assurances”, to
which this publication has not been submitted for approval. Canada: In Canada, this publication is distributed to clients of UBS Wealth Management Canada by UBS Investment Management Canada Inc. France : This
document is distributed by UBS (France) S.A., a French joint stock company with an Executive Board and a Supervisory Board (société anonyme à Directoire et Conseil de Surveillance), with share capital of EUR 125,726,944,
headquartered at 69 boulevard Haussmann, 75008 Paris, RCS Paris B 421255670, for its clients and prospects. UBS (France) S.A. is an investment services provider authorized by the French Prudential Supervisory Authority
(Autorité de Contrôle Prudentiel). Germany: The issuer under German Law is UBS Deutschland AG, Bockenheimer Landstrasse 2-4, 60306 Frankfurt am Main. UBS Deutschland AG is authorized and regulated by the
“Bundesanstalt für Finanzdienstleistungsaufsicht”.Luxembourg: This publication is not intended to constitute a public offer under Luxembourg law, but might be made available for information purposes to clients of
UBS (Luxembourg) S.A., 33a, Avenue J. F. Kennedy, L-1855 Luxembourg, R.C. No. B 111 42, a regulated bank under the supervision of the „Commission de Surveillance du Secteur Financier“ (CSSF), to which this publication
has not been submitted for approval. Saudi Arabia: This publication has been approved by UBS Saudi Arabia (a subsidiary of UBS AG), a foreign closed joint stock company incorporated in the Kingdom of Saudi Arabia
under commercial register number 1010257812 having its registered office at Tatweer Towers, P.O. Box 75724, Riyadh 11588, Kingdom of Saudi Arabia. UBS Saudi Arabia is authorized and regulated by the Capital Market
Authority to conduct securities business under license number 08113-37. Singapore: Please contact UBS AG Singapore branch, an exempt financial adviser under the Singapore Financial Advisers Act (Cap. 110) and a
wholesale bank licensed under the Singapore Banking Act (Cap. 19) regulated by the Monetary Authority of Singapore, in respect of any matters arising from, or in connection with, the analysis or report. The recipient of
this report represent and warrant that they are accredited and institutional investors as defined in the Securities and Futures Act (Cap. 289) UK: Approved by UBS AG, authorized and regulated in the UK by the Financial
Services Authority. A member of the London Stock Exchange. This publication is distributed to private clients of UBS London in the UK. Where products or services are provided from outside the UK, they will not be
covered by the UK regulatory regime or the Financial Services Compensation Scheme. © UBS 2012. The key symbol and UBS are among the registered and unregistered trademarks of UBS. All rights reserved
43